The state spent more than $49,000 to stabilize mercury-tainted material at an illegal gold mill in Mancos. Now the state mining board wants Red Arrow Gold Corp. to repay the money, and it moved Wednesday to revoke the company’s mining permit.

Red Arrow owner Craig Liukko did not attend Wednesday’s hearing in Denver, but in letters to regulators, he blamed the problems on a former business partner and a receiver appointed by a bankruptcy court, who has controlled access to Red Arrow’s property since April.

The state excavated and isolated soil at the mill, and it isn’t currently presenting a hazard, said Loretta Pineda, director of the Division of Reclamation, Mining and Safety…

More mercury remains to be removed from the Out West mine north of U.S. Highway 160, mining inspectors said. Pineda’s division is working with the U.S. Environmental Protection Agency on a permanent cleanup. And she still does not know the degree of pollution the mill produced in the past. The EPA is testing samples to figure out if there was a past risk, Pineda said…

On Wednesday, the Mined Land Reclamation Board found Red Arrow in violation of its order from August to clean up the site and pay a $100,000 fine. The board increased the fine to $285,000, increased Red Arrow’s bond and started the procedure to revoke Red Arrow’s mining permit in the next two months.

As part of the cleanup, the state removed mill tailings from a nearby pasture and the Western Excelsior aspen mill, across the street from the Red Arrow operation. Western Excelsior officials thought they were getting sand to patch holes in their lot, said Kyle Hanson, a manager at the aspen mill. The state did a good job of removing the mill tailings, he said…

The Mined Land Reclamation Board also cracked down Wednesday on another Red Arrow property, the Freda mine west of Silverton. Both portals at the mine have collapsed, and stormwater berms have failed, allowing tainted water an tailings to flow off the site toward Ruby Creek, said Wally Erickson, an inspector for the Division of Reclamation, Mining and Safety. The board fined Red Arrow $2,500 for the violations at the Silverton mine.